The cryptocurrency market saw a strong rally last week as hopes grew that the U.S. Federal Reserve (Fed) may cut interest rates in September.
On Friday, August 22, Bitcoin reached nearly $65,000 and Ethereum rose to $2,800. These increases came after Federal Reserve Chairman Jefferies Powell suggested the U.S. government might cut interest rates.
Market attention now shifts to upcoming US PCE data and other key economic indicators that could determine future trends.
Important Fed comments expected this week
San Francisco Fed President Mary Daly will be giving a television interview on Monday, August 26, followed by Atlanta Fed President Raphael Bostic on Wednesday, August 28. Investors are expecting these comments to echo last week’s dovish tone and further support market momentum.
However, any indication of a hawkish stance could quickly lead to a sell-off that could impact the entire financial environment, including the crypto sector.
US PCE and GDP data
In addition to the Fed update, traders are also awaiting the latest U.S. personal consumption expenditures (PCE) inflation data on Friday, which will provide a clearer picture of inflation trends.
Inflation is expected to rise slightly to 0.2% in July from 0.1% in June. Year-on-year inflation is forecast to stabilize at 2.5%. Core PCE, which excludes food and energy prices, is also expected to remain at 0.2% month-on-month but may edge up slightly to 2.7% year-on-year.
If the data shows a higher than expected inflation rate, it could dampen market optimism and trigger a pullback in the ongoing crypto rally. The coming week will be crucial in shaping market sentiment as traders await these key updates.
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